1. Field of the Invention
This invention relates to expenditure tracking systems and, more particularly, to an improved automated expenditure tracking system comprising a novel method and apparatus for automatically tracking check expenditures and deposits using printed bank checks having a plurality of graphic icons disposed thereon representative of particular expenditure categories.
2. Description of the Related Art
Millions of people utilize bank checks every day for personal and business use to transact sales of goods and services and to pay bills via funds deposited in a checking or money-market account. Millions more people use Automated Teller Machines ("ATM"), Point Of Sale terminals ("POS") or other Electronic Funds Transfer ("EFT") machines to withdraw or transfer cash electronically in order to make cash purchases and to obtain convenient amounts of cash for discretionary spending.
It is often desirable when making check transactions or ATM or POS withdrawals from a checking account to be able to keep track of and monitor expenditures according to a predetermined set of expenditure categories for purposes of budgeting and/or managing personal or business finances. For instance, it is convenient for a bank checking account customer to know at the end of each month not only how much money is currently available in the customer's checking or money-market account, but also what types and amounts of expenditures have been made during the previous month or several months on such items as food, clothing, entertainment, mortgage, rent, etc. In this manner, a bank customer managing his personal or business finances can identify possible problem areas in which expenses should be reduced in an effort to reduce overall costs and to save money. Such budgeting and monitoring of expenditures is often critical for successful long-term financial planning.
Experience has shown that most individuals fail to plan adequately for their financial future. A recent U.S. Census Bureau survey reports that over 85% of Americans 65 or older are living on an income of less than $10,000.00 per year. The majority of these households, however, earned enough income to set aside for more than an adequate retirement investment, but failed to do so. Unfortunately, many working individuals today are following the same trend toward future financial insecurity. Particularly in the hectic modern-day world of two income families and even greater financial pressures, it is absolutely essential to be able to monitor expenditures and investments in order to provide for a sound financial future.
The U.S. Small Business Administration has similarly noted that a large percentage of all new small businesses fail within the first year of operation. This is partially attributable to a lack of adequate financial planning and monitoring of expenditures by relatively inexperienced business managers. Without adequate budgeting and monitoring of business expenses, the cash flow of even a moderately successful business can be quickly subsumed by losses from poor investments and wasteful spending. Again, budgeting and monitoring of expenditures is critical to the financial well being of small businesses.
One of the main reasons individuals and small businesses fail to adequately plan their finances is the current lack of a convenient mechanism for budgeting and monitoring expenditures and investments. Larger businesses and more affluent individuals hire accountants and other professionals to budget and monitor their expenditures. But many working individuals and small businesses simply cannot afford such personalized professional services. These individuals and small businesses either perform these accounting services themselves or go without them.
For those individuals and small businesses that choose to perform their own accounting services, several tools have recently become available. Most notable are several computer accounting software programs that are now readily available to assist individuals and small businesses in personal and business financial planning. Typically, such software programs can be used with a personal computer or similar device capable of performing basic financial computations.
One particularly popular computer accounting software program is marketed under the name "Quicken.TM." and is available from Intuit, Inc. of Menlo Park, Calif. This program allows users to assign expenditure account categories by entering a text description of each into the program's database. For each check transaction, the user then identifies the appropriate account category and types in the check number and check amount. Once the information has been entered into the computer, it can be manipulated electronically to generate various types of account statements, expenditure charts and the like, which can be accessed by the user via a video display monitor, an attached printer or magnetic disk storage media. Deposits and other transactions are handled in a similar fashion by the user's manually entering the raw data from the deposit slip, transaction receipt or the like, into the computer.
A significant drawback of these types of computer accounting software programs is that they require the bank customer or user to enter into the computer "raw" data from each check transaction occurring within a given transaction period. This data may, for instance, be entered by the bank customer from his returned checks or from a separate ledger book in which check transactions are routinely entered and recorded. Inputting this data may require a considerable expenditure of time and effort where, for instance, the bank customer has made hundreds of individual check transactions during a given transaction period.
This secondary data entry step is also highly inconvenient. Experience has shown that, while many people want financial management tools, most lack the time and discipline necessary to maintain accurate financial records on their own. Busy families, individuals, and small businesses demand accurate financial reporting in order to reach their financial goals, but they often do not want to expend the significant amounts of time and effort required to maintain such records themselves. Many individuals, in particular, find the use of a personal computer or a keypad highly inconvenient for entering and recording check expenditure information. Recent statistics indicate that almost half of all American households are intimidated by computers. Other bank customers simply do not have access to a computer and, therefore, cannot benefit from these types of computer accounting software programs.
Even among those individuals and small businesses who own a computer and who have purchased accounting or financial planning software, research has shown that a significant percentage of them are not consistent with their inputting and reporting of check transactions. Quite often, after several months of neglect these computer software users, faced with many hours of "catch-up" work, abandon their bookkeeping tasks altogether. The result is that the computer software goes largely unused, defeating the very purpose of budgeting and financial planning.
Other expenditure tracking systems have been proposed in which the bank check, itself, can be labeled or marked by a bank customer with numbered expenditure categories. Upon presentment of such a check for payment, the bank teller re-enters the expenditure category number in magnetic code ("MICR") on the bottom of the check. The check is then processed using a MICR decoder. A centralized computer records the transaction amount and expenditure category number for each check and provides the customer with a periodic statement of expenditures. In this manner, the labor intensive step of re-entering expenditure account information into a computer is, in effect, shifted from the customer to the bank.
A drawback of these types of expenditure tracking systems, however, is that they are not well suited for individual and small business. Specifically, the numbers used to represent expenditure categories are not easily identifiable by customers as representing any particular type of expenditure. Rather, in order to record the appropriate category number a customer is required to refer to a separately recorded index or legend of accounts in order to match each number with its corresponding expenditure category. This cross-referencing of expenditure categories is highly inconvenient where, for instance, the customer does not have convenient reference to the recorded legend at the time the check is made out and the transaction executed. In such cases the customer either guesses, or he simply does not record the expense at all. This can cause undesirable inaccuracies in the expenditure tracking system. Numbered expenditure categories are simply not sufficiently intuitive or descriptive to allow the use of these types of expenditure tracking systems by the general banking public.
Another significant disadvantage with prior art expenditure tracking systems in general is that they cannot adequately account for ATM and POS transactions, which occupy an increasingly larger percentage of checking and money-market account transactions. To account for such transactions a customer must keep a copy of all receipts and then separately record them in either a written ledger or computer data base and reconcile these receipts with their bank statement at the end of each month or other financial period. Again, this takes time and effort and can result in undesirable inaccuracies as customers fail to stay current with recorded expenditure information.
Each of the above prior art systems require bank customers and/or the bank itself to perform secondary data entry operations, either in a separate account ledger or via a computer or MICR encoder keypad, in order to provide accurate monitoring of expenditures. It would represent a significant advance in the art to provide an automated expenditure tracking system which eliminates the need for such secondary data entry. It would represent a further advance in the art to provide such a system that is easy and inexpensive to use, is intuitive and easy to understand even in cross-linguistic environments without the need for special instructions or training, and that maintains consistent reporting regardless of a customer's level of diligence in recording individual expenditures.